Fresno, CA – A Latino civil rights organization filed a federal class-action lawsuit today against a Central California credit union that unlawfully denied membership and a loan to a DACA recipient based on her immigration status.

MALDEF (Mexican American Legal Defense and Educational Fund) filed the suit on behalf of Karla Ayala, a recipient of Deferred Action for Childhood Arrivals (DACA), who was told by Valley First Credit Union that she was ineligible for a personal loan because of her immigration status.

“California financial institutions should understand that they may not discriminate on the grounds of any person’s citizenship or immigration status,” said Thomas A. Saenz, MALDEF president and general counsel.  “This kind of unlawful discrimination not only harms individuals, but distorts our economy and diminishes the California dream.”

The suit, filed in U.S. District Court in the Eastern District of California, challenges Valley First’s refusal to consider Ayala’s application for membership and a loan because she is not a U.S. citizen or permanent resident as a violation of federal law and of California’s Unruh Civil Rights Act. The Unruh Act prohibits discrimination based on race, sex, color, religion, ancestry, national origin, immigration status, age and other characteristics. The suit also claims that Valley First, a member organization, violated Section 1981 of the federal Civil Rights Act of 1866, which prohibits discrimination based on alienage.

“We continue to see anti-immigrant discrimination by not only national banks but also more regional credit unions,” said MALDEF attorney Deylin Thrift-Viveros. “California’s Central Valley is a region rich with immigrants; it is a shame that a credit union that purports to serve the community determined that Karla’s DACA documents do not allow her to qualify for a membership, even though they qualify her for employment.  We are bringing this case to ensure that Valley First and other financial institutions cease these arbitrary discriminations on the basis of immigration status.”

Ayala, 24, of Turlock, Calif., began working for Valley First in October 2021. Shortly afterwards, she applied for a $7,000 personal loan through the credit union’s online portal. On Nov. 1, Ayala received an email telling her that the loan had been approved but that to receive the funds she would have to join the credit union, open an account, and provide a copy of her Social Security card. As a DACA recipient, Ayala is authorized to work in the U.S. and holds a Social Security Number for employment purposes.

On Nov. 4, Ayala paid a $5 membership fee, deposited $25 into a savings account and uploaded a copy of her Social Security card to the Valley First website. The next day, Ayala received a voicemail from a Valley First representative telling her the credit union could not grant membership or give her a loan with a “work-only Social Security Number.”

Ayala emailed the Valley First representative to make certain that, even though she was an employee of Valley First, her loan would not be approved, and the representative responded that Ayala was correct. Ayala also received a written notice informing her that she was not eligible for a membership but gave no reason.

“Being brought to the United States when I was young was already confusing and frightening,” said Ayala. “Growing up, I did not know the challenges I was going to face being undocumented.  Even with DACA, I was still denied a loan that was going to help me lower my debt before enrolling in a nursing program.  My good credit score seemed to not matter as soon as Valley First saw that I was not a U.S. citizen or resident. I am bringing this lawsuit because I want to bring awareness to this issue that DACA recipients are still struggling with and prevent this from happening to others who seek loans from Valley First.”

Valley First Credit Union is based in Modesto, Calif., and serves members who live, work, attend school or worship in California’s Central Valley.  The credit union offers a range of financial products from checking and savings accounts to personal loans and mortgages to its members.

Read the complaint HERE.